Jun 282017

What is a credit score?

A credit score is a three digit number that is derived from a variety of factors on a credit report. Most lending institutions will use FICO scores to determine credit worthiness. (The acronym FICO comes from the brand name of a credit score calculation created by Fair Issac & Co in1956.) Each person has three FICO scores, one from each of the three national credit bureaus: Equifax, Experian, and TransUnion. Although the scores are often similar, there are times when discrepancies on one report may throw off your credit report.

Credit scores range from 300 to 850: the higher the score, the lower the perceived risk. According to Experian, the average score is between 650 and 700. Anything over 700 usually suggests good credit management.

Credit scores often play an integral role when banks decide whether or not you will be approved for a loan. The scores will also affect your interest rate. Usually the lower the credit score, the higher the interest.

Several key factors, each carrying its own weight, determine a credit score. According to Experian these include:

Payment History: Late payments negatively affect your score. Thirty-two percent of your credit score is a result of your payment history

Utilization: Twenty-three percent of your score is based upon your credit accounts. If you use large portions of your overall available balance, that is taken to indicate credit risk

Balances: The amount of reported balances affects 15 percent of your score. Recent increases in balances may be an indicator of risk
Depth of Credit: The length of your credit history and the types of accounts you carry makes up 13 percent of your credit score. A good mix of accounts, including instalment loans and revolving accounts, may have a positive impact on your score
Recent Credit: Ten percent of your credit score is based upon the number of recently opened accounts and credit inquiries. Applying for several new accounts can be an indicator of credit risk

Available Credit: The smallest factor taken into consideration is available credit. Seven percent of the overall score reflects your account balances.

Learn more about Understanding Your Credit Score with Wall Street Survivor's Developing Your Credit course:

Jun 242017

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In my opinion, credit scores are one of the most obscure and methodical concepts to a client. I've actually had clients tell me something they swore would help their credit, when in fact it was the complete opposite.

One of the many examples I have is when I had a client tell me that he never fully paid off his credit cards because paying interest helped him get a better credit score. I'm going to explain to you what determines your credit score, the best way to get and keep a high score, and some common myths about your FICO score.

First let's go over what determines your credit score. There are 5 main factors. Coming in at 35% of your overall credit score is your payment history. Being late on any bills, or even worse having them go into collections, is the easiest way to drop your
credit score.

The second largest factor at 30% is the amounts you owe. If you have 5, 10 or even more credit cards and they're all maxed out, it shows you're a high credit risk b/ you can't seemingly pay your bills off. Length of your credit history comes in at 15%. Ideally 7 years or more is what is considered a long credit history.

Finally at 10% each is New Credit requests and type of credit mix in use. New credit is in reference to how often you run your credit — be it for a cell phone, car loan or any other type of credit. If you're consistently running your credit, it's probably doing you some harm. Type of credit mix in use basically comes to what type of accounts you have open.

The ideal situation is some mystery mix of a home loan, car loan and 2 to 3 credit cards. That doesn't mean you should go get a car loan when it doesn't make sense financially. Remember, it's only a small factor, and so long as you have some credit in use you'll be just fine.

When it comes to getting and keeping a high FICO score, there are a few guidelines you should follow. First and foremost, is to make absolutely sure that you pay all your bills on time. As a reminder, I set an alarm on my phone, which is synced to
my email.

Every first of the month, my phone and outlook both remind me that it's time to pay all my bills. Secondly, is the length of your credit, ideally you want 7 or more years of credit history. Finally, you want at least two but no more than four credit cards with high limits. Other than these three things, the best way to get a high score is to avoid any court judgments, past due bills,
and collections.

In regards to keeping your high credit score, note that credit cards usually become people's biggest downfall. Yes, you DO want high limits on your credit cards, but that doesn't mean that you're supposed to max them out. The fact that lenders trust you with a high credit limit is actually a good thing. The key is to never have more than 25-30% on one credit card. This makes it seem like you know how to handle your debt more efficiently.

Now let's debunk some of the myths we all commonly hear. First, having to pay interest because you did not pay off your credit card in full, will ABSOLUTELY NOT help your credit score. Again, it is the debt to credit limit ratio that will be taken into consideration. Second, that Best Buy payment plan that you've never been late on will help your credit score.

This is completely FALSE, the only payment plans that will ever show up on your credit as mentioned above are structured payments, such as a house or car, and revolving payments, such as credit cards which we already discussed.

Other things that will not show on your credit report unless they send you to collections are your cell phone bills, electric bills, and even those store credit cards without a Visa, MasterCard, Discover, or American Express logo on it.

Remember, without any of those logos, those credit cards, do absolutely nothing to help your credit. Number three, if you don't use a credit card that you've had for years on end, you should close the account. Again, this is FALSE. Remember, long credit history is good. You especially don't want to close this unused credit card if it has a high limit. In fact, you should probably use it once every few months on something very minor, such as socks just to make sure they don't close it due to inactivity.

Remember, your FICO score is your reputation to the financial world, guard it with your life. Just because you have a lower credit score doesn't necessarily mean you won't ever be able to get a loan for anything. But having a better credit score, will almost guarantee that the same loan will be easier to finance, and will be much much cheaper, saving you thousands to tens of thousands of dollars every year… Now that's good to know.

Contact Davide Pio Today | SF Bay Area Real Estate
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Apr 262017

Getting rid of financial debt collectors and also lawfully eliminating your charge card debt without paying is feasible. Hi, my name is Mel Thompson, which is what I did when I owed countless bucks in charge card financial debt I could not pay for to pay. I got rid of the financial obligation enthusiasts and shielded my credit history. Ever since I have actually been aiding others to help themselves defeat debt collectors and safeguard their credit report with my credit card debt survival ebooks.

Get aid now by calling me on 508-796-5101 or visiting my

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I recognize what it resembles to be in debt. I wish to show to you my keys on ways to remove financial debt collectors as well as on exactly how I legitimately removed my bank card debt without paying it off. I left my psychological despair as well as found the self-confidence to do that by informing myself.

If you have been tormented with overdue bank card debt as well as its resulting damages to your credit score, you have actually probably tuned into pitches for debt repair. Be careful. Do not pay self-claimed experts any money on the guarantee of much better credit report in the future.
You can do exactly what they suggest to do for you, WHILE you are beating financial obligation collectors and collection lawyers.
Hi, my name is Mel Thompson and that is exactly what I did when I owed thousands of bucks in charge card financial debt I could not afford to pay. I eliminated the debt enthusiasts as well as secured my credit history. Ever since I have actually been aiding others in order to help themselves beat debt collection agencies as well as safeguard their credit rating with my credit card financial debt survival ebooks.

If you have actually been examining your credit score, you have possibly seen that in addition to the initial charge card bank there are several financial debt collection agencies with an adverse listing on your credit scores report for that exact same bank's bank card financial obligation. These multiple listings for each and every charge card debt are what actually spoil your credit history. Each financial debt collector puts a bad mark on your credit score to encourage you to pay them or clear up with them. Unless you do something about it, that demerit can remain there for seven years from the day of very first misbehavior of that financial obligation.

If you have a number of overdue charge card, you can see exactly how this multiplier impact can work. Two or 3 uncollectable bills could mushroom right into eight or twelve adverse listings, if you count each financial institution's financial obligation collection agency, one or more scrap debt customers that acquire after that offer each financial debt, along with their debt collector and/or collection law firms.

Obtaining the original charge card financial institution's unfavorable listing off of your debt report is hard. Do not let a scammer inform you otherwise.
Nevertheless, financial debt enthusiasts and collection attorneys, in addition to scrap financial debt purchasers are covered by the Fair Financial obligation Collection Practices Act, the FDCPA, unlike initial creditor credit card banks, who are not covered by the FDCPA. Adverse credit listings by financial debt enthusiasts are taken into consideration collection task by the FDCPA, and because of this, should be removed from a consumer's credit rating report, if the consumer informs the financial obligation enthusiast in contacting stop all collection activity.

The most effective layout for that created notification is a debt validation letter. That notice must be sent to each financial debt enthusiast within Thirty Days of invoice of their initial written collection notification. In addition to the direction to cease all collection activity, that letter reveal reject as well as dispute the alleged financial debt. It should ask for specific, comprehensive paperwork of the agreement, a detailed accounting of the alleged amount owed, and evidence of possession, if it is from a scrap financial obligation purchaser or their financial debt collector.

Unfortunately self-claimed specialists do not understand what do to put in a debt recognition letter. My letter works whenever. Simply ask the people I have actually aided. You could locate it in my financial debt collector and non-payment web content at www.creditsabre.com.

[This content is not meant as a substitute for lawful suggestions. If you require an attorney in your area, get in touch with an accredited attorney in your state.]

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